Appeals Court -- January 12, 2012
Facts: Wife filed for divorce in Probate and Family Court. The couple had two minor children during the marriage. At the time of divorce, the husband owned fifty percent of the shares in New England Technical Sales (NETS) where he also drew a base salary of $100,000 a year. He also owned forty percent of shares in Online Marketing Solutions, Save Harbor, Inc. (OMS). However, he did not draw a salary from OMS. The fair value of the husband’s interest in NETS and OMS was $21,000 and $71,000 respectively. The judge also found the loan receivable on both companies were $675,000 which were considered assets subject to division. Both companies were also paying many of the husband’s personal bills which caused the court to believe that the true income was closer to $200,000 a year. On the other hand, the wife was employed as a part-time teacher earning $8,450 a year and she was caring for the children at home. She owned interests in Scarfo Constructions, Inc.(Scarfo Consturction), Liberty Manor, Inc.(LMI), and Liberty Homes, Inc.(LMH). Based on expert testimony, the judge found that her interest was vauled at $291,000 at Scarfo Construction and $75,000 at LMI and LHI as of December 31, 2008. The marital estate was valued at $2,068,049.
The judge determined that each party was entitled to one-half of the value of the marital estate, $1,034,024. Therefore, the judge ordered the husband to pay the wife a sum of $260,142 to equalized the division since the assets assigned to the wife only totaled to $773,882. The judge also ordered the husband to pay $500 a week of child support, $940 a week of alimony, and $175,000 for legal fees and costs. The judge also found that the husband was in civil contempt for failure to comply with certain provision of the divorce judgement, which the husband challenged. He also alleged that the judge erred in valuing the wife’s business interests.
Issue #1: Whether or not the judge in Probate and Family Court erred in valuing the wife’s business interested.
No in part. The interest of the businesses were valued using December 31, 2008 as the date, which the husband was given sufficient time to change to a different date. Therefore, the judge decided to use the date. The judge’s reliance of the asset based valuation method based on expert’s testimony and the totality of circumstances was not clearly erroneous. However, the court determined that the judge did err in adopting the marketability discount. The assets in question were being distributed in a marital division but not in an open market.
Issue #2: Whether or not the husband was in civil contempt when he failed to pay judgement.
Yes. In order to find one in civil contempt, there must be clear, undoubted disobedience and a person may not be sentenced to prison for failure to pay if he can display that he is unable to. After complying with other divorce orders, the husband clearly still had the ability to pay the judgement. (YN)
